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Report: Raising minimum wage will create jobs

Doug Schorpp

Aug 13, 2012

Nicole Thompson of Rock Island is doing her best to support herself and her two boys while working as a cashier at a McDonald’s restaurant in Rock Island.

But it is not easy.

“I have a boy, 4, one 10 and one son, 20, who just got out on his own. And he has to work two jobs because he cannot support his self either,” said Thompson, 34. “It has been a real struggle for my family. But we are making it.

“I like my job and the people I work with. But I work 40 hours per week, and I live check to check. It is really hard and really frustrating. Some days, I don’t even know how we are going to eat.”

She, of course, favors a minimum wage increase. Thompson said that would help her situation, although “it seems like everyone is struggling these days,” she said.

The Economic Policy Institute, a Washington, D.C., economic think tank, has released findings of its national minimum wage analysis, including how proposed increases in the federal minimum wage law would affect various demographics.

Key findings include that if the proposed increase to $9.80 occurred by July 1, 2014, for example, it would raise the wages of 28 million workers nationally. Also, it would result in a net increase of about 100,000 new jobs nationally, 4,500 in Illinois and 1,000 in Iowa over the the phased-in period.

Doug Hall is author of the report. He is director of EARN, or Economic Analysis and Research Network, a project of EPI. “EARN is a partner with 57 state groups in 43 states,” he said of other nonprofits.

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He said misconceptions also surfaced in his findings.

“There are some perceptions of minimum wage that is not always accurate,” Hall said. “There is a misconception that it is mostly teenagers who are working part-time jobs to finance their social lives. But there are more often bread winners in families who make minimum wage. They are married. They have children.”

Hall said nationally, about 88 percent of workers who would benefit from the increase are at least 20 years old. Although workers of all races and ethnicities would benefit from the increase, non-Hispanic, white workers are the largest share (about 56 percent) of those who would be affected nationally.

On March 29, Sen. Tom Harkin, D-Iowa, introduced the Rebuild America Act, which includes an increase in the federal minimum wage from the current $7.25 to $9.80 via three incremental increases of 85 cents after which it would be indexed to inflation.